News Release
Purchasing Managers’ Index™
MARKET SENSITIVE INFORMATION
st
EMBARGOED UNTIL: 0930 (Mexico City) / 1430 (UTC), September 1 2016
Markit Mexico Manufacturing PMI™
Growth of manufacturing sector remains subdued in August
Key findings:
Slight fall in output recorded, but solid rise in new
orders signalled
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Employment growth maintained despite signs of
excess capacity
Price pressures mount due to unfavourable
exchange rate movements
Data collected August 12-22
Markit Mexico Manufacturing PMI (seasonally adjusted)
than 50.0 indicates overall improvement of the
sector.
After accounting for seasonal factors, the headline
PMI recorded a level of 50.9 in August. That was up
from 50.6 in July and above the 50.0 no-change
mark for a thirty-fifth month in succession, but
nonetheless represented only a marginal pace of
expansion.
New order levels continued to rise in August, with
the rate of growth the best recorded for three
months. However, being well below the historical
survey average, the pace of expansion was
relatively underwhelming.
According to manufacturers, this was a key factor
behind the slight drop in production during August,
the second such decline in the past three months.
There was also some evidence of growing spare
capacity in the sector, with manufacturers
comfortably able to deal with both incoming and
existing contracts as evidenced by a sharp drop in
backlogs of work in August. Latest data showed
that the monthly fall in work outstanding was the
strongest recorded by the survey since July 2014.
Source: IHS Markit
There was a marginal improvement in the operating
conditions of the Mexican manufacturing sector
during August, with a slight fall in output more than
offset by positive growth in both new orders and
employment. However, cost pressures intensified
and evidence of growing spare capacity was
provided by a sharp and accelerated deterioration
in backlogs.
The headline Markit Mexico Manufacturing PMI is a
composite single-figure indicator of manufacturing
performance. It is derived from indicators for new
orders, output, employment, suppliers’ delivery
times and stocks of purchases. Any figure greater
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Nonetheless, there was a net increase in staffing
levels for the twenty-fifth month in succession,
although the rate of expansion was again marginal.
On the price front, input costs continued to rise
sharply in August. Panellists widely blamed
unfavourable exchange rates and the inflationary
effect on the price of imported goods for the latest
rise in overall cost burdens.
A number of panellists responded to higher input
costs by raising their own charges. Moreover, the
rate of inflation was solid and the strongest seen
since April.
Purchasing activity continued to rise in August,
although the pace of growth was marginal and the
weakest recorded by the survey since January.
© IHS Markit 2016
News Release
Inventories of inputs were also slightly down,
reported to be the result of underwhelming growth
in new orders and the broad stagnation of output.
Comment
Commenting on the Mexico Manufacturing PMI
survey data, Paul Smith, senior economist at IHS
Markit and author of the report, said:
“The Mexican manufacturing sector continued to
record an underwhelming level of growth during
August, with the PMI only fractionally higher than
July’s near three-year low. A fractional fall in output
weighed heaviest on the sector, although there was
some positive news on the new orders front, with
growth accelerating since the previous month albeit
to a still historically subdued level.
“Meanwhile, cost inflation accelerated from July’s
low amid reports that unfavourable exchange rate
movements had pushed up imported raw material
prices. This encouraged companies to increase
their own charges to the greatest degree for four
months.
-Ends-
For further information, please contact:
IHS Markit
Tim Moore, Senior Economist
Telephone +44-1491-461-067
Email [email protected]
Joanna Vickers, Corporate Communications
Telephone +44-207-260-2234
Email [email protected]
Note to Editors:
The Markit Mexico Manufacturing PMI is based on data compiled from monthly replies to questionnaires sent to purchasing executives in
around 300 manufacturing companies. The panel is stratified company workforce size and by Standard Industrial Classification (SIC) group,
based on industry contribution to Mexican GDP. Survey responses reflect the change, if any, in the current month compared to the previous
month based on data collected mid-month. For each of the indicators the ‘Report’ shows the percentage reporting each response, the net
difference between the number of higher/better responses and lower/worse responses, and the ‘diffusion’ index. This index is the sum of the
positive responses plus a half of those responding ‘the same’.
Diffusion indexes have the properties of leading indicators and are convenient summary measures showing the prevailing direction of
change. An index reading above 50 indicates an overall increase in that variable, below 50 an overall decrease.
Markit do not revise underlying survey data after first publication, but seasonal adjustment factors may be revised from time to time as
appropriate which will affect the seasonally adjusted data series. Historical data relating to the underlying (unadjusted) numbers, first
published seasonally adjusted series and subsequently revised data are available to subscribers from Markit. Please contact
[email protected].
The Manufacturing Purchasing Managers' IndexTM (PMITM) is a composite index based on five of the individual indexes with the following
weights: New Orders - 0.3, Output - 0.25, Employment - 0.2, Suppliers' Delivery Times - 0.15, Stock of Items Purchased - 0.1, with the
Delivery Times Index inverted so that it moves in a comparable direction.
The Purchasing Managers’ IndexTM (PMITM) survey methodology has developed an outstanding reputation for providing the most up-to-date
possible indication of what is really happening in the private sector economy by tracking variables such as sales, employment, inventories
and prices. The indices are widely used by businesses, governments and economic analysts in financial institutions to help better
understand business conditions and guide corporate and investment strategy. In particular, central banks in many countries (including the
European Central Bank) use the data to help make interest rate decisions. PMI surveys are the first indicators of economic conditions
published each month and are therefore available well ahead of comparable data produced by government bodies.
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© IHS Markit 2016
News Release
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About PMI
Purchasing Managers’ Index™ (PMI™) surveys are now available for over 30 countries and also for key regions including the eurozone.
They are the most closely-watched business surveys in the world, favoured by central banks, financial markets and business decision
makers for their ability to provide up-to-date, accurate and often unique monthly indicators of economic trends. To learn more go to
www.markit.com/product/pmi.
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© IHS Markit 2016